January 5, 2015
- Due to the holidays, there was no market commentary last week. However, recent bearishness on the NYMEX natural gas market did not take a break. Over the past two weeks the market has fallen more than 10% on the 12 month average and over 13% on the prompt month. Much of this drop came on Monday the 22nd when the prompt month dropped 32 cents and the 12 month average shed over 21 cents in one day.
- Last week also saw a few significant settlement prices. Monday the 29th saw the January 2015 contract expire at $3.189. This is the lowest contract expiration price since the October 2012 contract expired at $3.023. Additionally, New Year’s Eve saw the prompt month settle under $3.00 for the first time since 9/26/12.
- The winter 2015-2016 average has dropped quite a bit over the past two weeks as well. On 12/19 the strip settled at $3.707 and has dropped just over a quarter to settle at $3.447 on 1/2.
- Storage has had a couple of bearish withdrawals the past two weeks due to a warmer-than-normal December. This has allowed current inventories to all but catch up to the 5 year aver-age, falling only 81 BCF short at this point.
- The NOAA 6-10 day forecast is finally starting to look a little bit like winter! Much of the country, including the consuming region in the Northeast, is expecting some below average weather in the coming weeks. Market movement has been heavily influenced by forecasts for the remainder of this winter and it will be key to watch how trader’s react to cooling predictions.